An Unexpected Move from Binance: They Made a Deal with a Cryptocurrency Linked to Their Competitor

Binance and Circle, two giants of the cryptocurrency industry, have deepened their collaboration, integrating Circle’s yield-generating asset, USYC, as collateral for Binance’s institutional clients.

This move marks the latest step in the strategic partnership between Circle Internet Group Inc. (CRCL) and Binance. Circle was previously known for its close ties to Coinbase.

With the new integration, Binance's institutional users will be able to use the USYC token as collateral for over-the-counter derivatives transactions. USYC shares a similar structure to BlackRock's tokenized money market fund, BUIDL. Furthermore, USYC will be issued directly on Binance's native blockchain, BNB Chain, giving users easier access to on-chain financial applications.

Catherine Chen, Head of VIP and Institutional at Binance, said in a statement, “We are committed to building secure, accessible, and capital-efficient solutions for institutional investors. The integration of USYC into the Binance trading environment is a significant demonstration of our support for the future of capital markets.”

Circle recently integrated USYC into its platform through its acquisition of Hashnote, a tokenization startup launched by Cumberland Labs. According to data from RWA.xyz, approximately $686 million in assets are represented on-chain through reverse repurchase agreements, largely based on US government bonds.

USYC acts as a bridge between tokenized cash and Treasury bonds, offering near-instant convertibility with Circle’s stablecoin, USDC. It is also used as a yield-generating collateral option on crypto exchanges, custodians, and in transactions with prime brokers.

*This is not investment advice.